MAJOR DELAYS at the Registrar of Companies is costing the state millions in foreign investment, said DISY deputy Maria Kyriacou yesterday.
Kyriacou highlighted that staff shortages and anachronistic procedures at the Registrar had created a backlog of 2,500 companies awaiting registration. Meanwhile, hundreds of thousands of documents were lying around waiting to be filed at the Registrar.
The DISY deputy warned that with no space for their safe storage, the documents were in danger of causing billions of pounds in damages to the companies and the state if they were to be lost.
“In most European countries the whole procedure for registering a new company takes between three hours and three days. In Cyprus, despite the fact our purported aim is to encourage investments and development, it takes a whole month to register a company. If there is some small omission, it can take two months to register, unless the [Commerce] Minister himself approves the company before then,” said Kyriacou.
The deputy asked what criteria the minister used in approving a company. She highlighted that any political intervention in the registering of companies went against the specific law on companies.
Failure to update the Registrar files with the thousands of document waiting to be filed was also a concern because it created insecurity in the marketplace and hampered transactions as businesses could not get up to date access on important details like the shareholders and directors of companies.
“There is no room for further delay. There has to be an immediate solution to the problem to ensure the smooth running of the market and the safety of transactions,” she said.
President of the Bar Association Doros Ioannides was quoted in Politis saying his colleagues were at their wits end regarding the delays. Ioannides said hundreds of lawyers were complaining on a daily basis saying they were losing clients because companies got tired of waiting around for registration. Even after paying an extra £120 for the fast-track procedure, they still had to wait up to a month to be registered.
One Registrar official told the paper that the problem was procedures had changed, creating huge delays, while staff was at the same size as it was in five years ago, even though the number of companies seeking registration has since tripled.
The Commerce Ministry acknowledged the delays, saying it was down to the increased workload. While in 2002, 8,400 applications were submitted to the Registrar this number reached 20,400 in 2006. The ministry said it was planning to hire 16 new examiners on contract employment to get through the backlog.
One member of the Cyprus International Businesses Association (CIBA) confirmed to the Cyprus Mail that the feeling of exasperation among foreign companies was prevalent.
“Definitely, there is a serious problem which is well known within professional legal circles,” said the CIBA member who did not wish to be named.
Kyriacou gave a list of suggestions yesterday to tackle the problem. First on the list was to review the anachronistic method of handling small errors by sending registered mail to law firms and waiting for a posted response.
“In the electronic age of commerce and exchange, post is a romantic memory,” said Kyriacou.
The DISY deputy called on the minister to stay clear of Registrar procedures, and instead hire 10 examiners to go through the 2,500 applications backlog while leaving everyday registration to others.
Kyriacou called on the ministry to make experienced contract workers permanent members of staff and hire new staff. The gist of her proposals was to reform the department and to modernise its organisational structure by using electronic data services to upload information; make possible the automatic approval of company names through the internet and allow for the paying of fees using credit cards over the internet.
